IRJMSH Vol 11 Issue 11 [Year 2020] ISSN 2277 – 9809 (0nline) 2348–9359 (Print) International Research Journal of Management Sociology & Humanities ( IRJMSH ) Page 237 www.irjmsh.com Impact of working capital on profitability: study of selected banks in India Anju Dagar (Research scholar) Dr KK Garg Associate Professor, Lingayas Vidyapeeth Abstract Working capital management plays a vital role in the success of businesses because of its effect on profitability and liquidity. INTRODUCTION In the current perspective of the competitive market short-term assets and liabilities are important components of total assets and need to be analyzed carefully at the side of long- term assets and liabilities. Management of this short- term assets and liabilities are subject to inspect carefully from the time because working capital management plays a vital role for the firm’s profitability and risk as well as its value investors all over the world lay their money in a business to get some return on their investment in any form of the business. In small and medium organizations like ownership and association proprietors have immediate or aberrant authority over the administration of the business in this way, they, at the end of the day, are answerable for all the benefit and misfortune. Then again in the huge worldwide organizations the administration of the organization deals with the undertakings of the organization for the benefit of proprietors however proprietors need the executives to take such choices which will give positive motion to showcase, increment the estimation of the firm, create productivity and expand holding period return. The significance of working capital administration can't be famished of in any association. A firm ought to have satisfactory degree of liquidity on the grounds that inordinate liquidity results into inactive supports which don't make any worth. Then again low degree of liquidity may result into the absence of assets to meet monetary commitments subsequently makes monetary misery. The main issue or the focal point of working capital approach is on the liquidity of current resources for meet the present moment or current liabilities. Liquidity gives the genuine thought of uncompromising stance's to meet its developing liabilities. A firm ought to have adequate degree of liquidity on the grounds that over the top liquidity results into inactive finances which don't make any worth. Another point is that low degree of liquidity may result into the absence of assets to meet monetary commitments henceforth makes monetary pain. Most firms have characterized their ideal degree of working capital, which will make an incentive for them. For such firms working capital is a piece of their monetary administration procedure. For example to build their deals various firms utilizes diverse credit strategies. Severe credit strategy will bring about the diminishing in the deal in this way organizations like to have such an approach which encourages the clients and the goals of the firm. Besides such a credit is reasonable wellspring of account for the clients instead of acquiring cash from any monetary